CB data: Cabraal shoots down Harsha’s claim

Saturday, 21 April 2012 02:11 - - {{hitsCtrl.values.hits}}

By Sandun A. Jayasekera

Dismissing the claim by the UNP’s Chief Economist MP Dr. Harsha De Silva that the Central Bank was doing “creative accounting” to camouflage the reality and show better economic and GDP performance, Central Bank Governor Ajith Nivard Cabraal said per capita GDP was calculated according to international norms.

Referring to our front page lead story yesterday titled ‘CB statistics under fire,’ quoting Dr. De Silva, Cabraal stressed that the Department of Census and Statistics calculated the per capita GDP (per capita income) according to the UN System of National Accounts, which is the commonly used and widely accepted methodology by international organisations.According to this methodology, per capita GDP is derived by dividing the annual GDP at market prices by the mid-year population. Per capita GDP in Sri Lanka Rupees is then converted to US Dollars by using the annual average exchange rate for the particular year. This is the methodology that has been used even in the past, he said.

“Dr. Harsha de Silva has claimed that the Government has not taken into consideration the depreciation of the exchange rate in November 2011. The annual average exchange rate used in the computation of per capita GDP for 2011 was Rs. 110.57, which includes the depreciation in November 2011. The Central Bank wishes to emphasise that it is the international norm to use the annual average exchange rate in arriving at the per capita income and not the end-of-year exchange rate,” Cabraal emphasised.

The Medium Term Macroeconomic Framework presented in Table 1.5 of the CBSL Annual Report 2011 is based on Central Bank’s forecasts of macroeconomic variables.

The per capita GDP forecasts have been estimated based on the projected annual GDP, mid-year population and annual average exchange rate of the Sri Lanka Rupee against the US Dollar for the years 2012 to 2015, Cabraal added.

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